A post-bankruptcy Blockbuster will likely be much leaner and a shadow of its former self, which will be a boost to its competitors. Wedbush Morgan analyst Michael Pachter believes that BB’s rivals, particularly Redbox, should be able to absorb the large number of consumers a streamlined and simplified Blockbuster will likely be shedding.
Seattle Weekly quotes Pachter as saying the following on the matter:
“In bankruptcy Blockbuster is going to be managed to generate as much cash as possible. They’re going to cut out all marginal stores, defer maintenance, order less inventory and take a long route to liquidation . . . The only way Blockbuster can be more profitable is to be smaller. And a small Blockbuster means more displaced consumers, which means more opportunity for Redbox.”
Can this skeletal BB that Pachter describes be competitive in the marketplace that sent it into bankruptcy? Will these displaced customers flock to Redbox as the analyst predicts?
(via Seattle Weekly)